Previous Page Next Page Page 24 of Question 24 (3.3 points) There are two stocks (stock 1 and stock 2) in a portfolio and two possible states of economy (good and bad) that may occur. The return of stock 1 (2) is 9% (12%) in the good state that has a probability of 60%. The return of stock 1 (2) is -2% (-4%) in the bad state that has a probability of 40%. The portfolio allocates $3,000 to stock 1 and $7,000 to stock 2. What is the expected return of stock 2? OA A) 3.6% B) 6.6% C) 5.6% D) 4.6% Page 24 of 30